His resignation brings the curtain down on his second spell in charge of Oranje and casts doubt over whether he will coach again.
The 63-year-old informed the Royal Dutch Football Association (KNVB) that he will not continue beyond the end of his current deal.
The announcement comes just hours after the Netherlands’ World Cup campaign came to a painful end.
Koeman’s side were knocked out in the round of 32 after suffering a penalty shoot-out defeat to Paraguay, ending hopes of a deep run at the tournament.
The defeat has now prompted the former Barcelona and Valencia boss to call time on his tenure.
In an emotional farewell statement, Koeman admitted the decision had been far from straightforward after years spent working closely with his coaching staff and players.
“Precisely because I have worked so closely and intensively with this coaching staff and this group of players for such a long time, this was not an easy decision to make,” he said.
Despite the bitter nature of the Netherlands’ early exit, Koeman insisted he would look back on his time in charge with pride rather than regret.
He thanked everyone involved with the national team across both of his spells as manager.
Koeman also revealed his family played a major role in his decision, saying he now wants to spend more time with his wife, children and grandchildren after years in the dugout.
His comments have also fuelled speculation that this could mark the end of his coaching career altogether, with the Dutchman suggesting that walking away now feels like the right and most natural decision.
The KNVB must now begin the search for a new manager as the Netherlands look to regroup after a hugely disappointing World Cup campaign.
The country is blessed with several available coaches, such as Arne Slot and Erik Ten Hag, and should avoid regurgitating the same names as in previous years.
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